Tourism sector works to recover market amid new COVID-19 outbreak

Visitors to the largest theme park of Vietnam in Phu Quoc Island, Kien Giang province (Photo: VNA)

Speaking at an online meeting last week, VNAT General Director Nguyen Trung Khanh said the agency was working with localities to rehabilitate the tourism industry as the new outbreak has hit businesses again after three months of no locally transmitted cases of COVID-19.

He noted that hotels, transport and other tourism services have a close mutual relationship. 

Any disruption to the relationship greatly affects the overall operation of the tourism industry, he said.

Tourism has been one of the industries hardest hit globally by the pandemic, and Vietnam is no exception, with foreign tourist arrivals and tourism revenue falling by more than 50 percent in the first half of the year, according to Khanh.

After a brief recovery of domestic tourism thanks to many promotions, travel firms are now facing thousands of cancellation and refund requests.

Vo Anh Tai, deputy general director of Saigon Tourist Travel Service Company, said that most customers who want to cancel tours have requested a full refund of their payment.

“This is a problem that enterprises cannot solve by themselves. When customers buy tours, the companies have to pay a part of that money to service providers such as airlines, restaurants, hotels and resorts,” he said.

Nguyen Thi Hoat, executive director of Top Travel, said the firm is facing challenges related to cash flow. 

“Many customers are delaying their payment of the remaining amount that is due for their chosen tour. When making a contract, the travel company usually takes only 50-80 percent of the tour value.”

Huynh Phan Phuong Hoang, deputy general director of Vietravel, said that as of August 5, more than 22,300 tourists had cancelled tours worth a total revenue of 102 billion VND (4.4 million USD). The number is expected to increase in the coming time.

Travel firms typically have to book services with service providers in advance. In “force majeure” events in previous outbreaks, only some service providers agreed to refund, while many others applied penalties when customers cancelled tours, Hoang said.

Khanh said the VNAT would continue to provide support to enterprises. However, many tourism businesses said they have been unable to receive government incentives since the first COVID-19 outbreak due to the complicated procedures they must follow.

Most travel businesses have requested a reduction of VAT as well as electricity and water bills. They also would like extension on rental payments and financial support for employees in the tourism sector.

Tour cancellations

Preliminary statistics from localities and businesses show that the number of tourists who have postponed or cancelled tours has reached hundreds of thousands across the country, significantly affecting tourism service providers.

The cancellation rate in localities is expected to be more than 90 percent by the end of the month. Major tourist hotpots in the country have confirmed that the cancellation rate of tourist bookings has reached more than 80 percent. 

Some customers have agreed to postpone or adjust their travel times, but others have cancelled their tours and requested a full refund.

After social distancing measures were suspended in late April, the domestic tourism industry strongly revived between June and early July. According to the VNAT, hotel room occupancy in mid-June reached 60 percent by mid-week and up to 90 percent by the end of the week.

Across the nation, the number of domestic tourists in June was estimated at 7 million, twice the figure in May. In Da Nang, the city's tourism authority recorded more than 450,000 visitors in June, up 85 percent from May.

In response to the resurgence of COVID-19, Vietnam is taking serious measures to stop the virus from entering and spreading in the community, the VNAT said./.

VNA